13.2 Taxable value
The taxable value of a board fringe benefit is $2 per meal per person ($1 per person if under the age of 12). You reduce this by any amount the employee pays for the meal. Incidental refreshments such as morning and afternoon teas supplied as part of board are exempt from fringe benefits tax (FBT).
Where you have an agreement in place with your employee, which requires them to make a contribution towards their board meals and their accommodation, you may apportion that contribution on any reasonable basis.
An employee is provided with accommodation and meals at their place of work. The employee contributes $182 a week ($26 a day) towards their accommodation and meals as per their remuneration agreement. The employer apportions the contribution as follows: $6 per day as a contribution towards the three meals provided each day. In effect this will reduce the taxable value of each board fringe benefit to nil. $20 a day will be the employee's contribution towards their accommodation.
Goods and services tax (GST) does not affect the taxable value of board fringe benefits so these benefits are always 'grossed up' at the type 2 rate. For more on GST and FBT, refer to What is fringe benefits tax.
Grossing up means increasing the taxable value of benefits you provide to reflect the gross salary employees would have to earn at the highest marginal tax rate (including Medicare levy) to buy the benefits after paying tax.